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Applying the faithless servant doctrine, employer does not have to pay benefits to former employees found guilty of embezzling

Applying the faithless servant doctrine, employer does not have to pay benefits to former employees found guilty of embezzling
William Floyd Union Free School Dist. v Wright, 61 AD3d 856

The William Floyd Union Free School District asked Supreme Court to relieve it of its contractual obligation to provide postretirement health and dental insurance benefits to Daniel C. Cifonelli, its former assistant superintendent and James A. Wright, its former treasurer because of their respective breaches of their fiduciary duty to the school district.

Both Wright and Cifonelli pleaded guilty to various counts of grand larceny, including embezzled money from the district.

The Supreme Court decided that Cifonelli?s and Wright?s admissions of wrongdoing with respect to fiduciary duties to William Floyd warranted their respective forfeiture of insurance benefits for a period of 10 years.

The Appellate Division disagreed and said that William Floyd UFSD was entitled to an order ?permanently? granting it relief from having to pay ?compensation, deferred or otherwise? where, as here, both Cifonelli and Wright ?had engaged in repeated acts of disloyalty.?

Such ?complete and permanent forfeiture? said the court, is warranted under the ?faithless servant doctrine.?

Full post as published by New York Public Personnel Law on February 03, 2010 (boomark / email).